Human Capital: Assets or Chattel?

Like most HR professionals my inbox is bombarded with data almost all day. But one caught my eye the other day, which led me to begin to think about the question I posed in the title to this post.

One of the posts I get is from the Networked Lawyer Blog in which they discussed the case of USA vs. Nosal in which a recruiter for Korn Ferry was charged with the theft of Korn Ferry proprietary and confidential information in the form of candidate information. When I talked to some of my recruiting friends the response I got was that the candidates belong to the recruiting agency not the recruiter.

I worked for several recruiting agencies in the past and the same situation prevailed there as well. What bothered me the most in this situation was that in this social media connected world, can a recruiting firm or a corporation truly claim that the background of those employees or candidates is a trade secret.For edification I looked up the definition of trade secret and found that the definition states that a trade secret is a secret process, technique, method, etc., used to advantage in a trade, business, profession, etc. Nowhere in the definition does it say human capital assets.

In 1973, just as I was starting as a recruiter a blockbuster book was released by Allan Cox titled “Confessions of a Corporate Headhunter” in which Allan Cox laid out the whole recruiting process to the general public. So I reached out to him and asked him about his thoughts and he responded “ what good is a recruiter to the world if s/he doesn’t remember, especially talented people he comes across, presumably many of them, for their gifts and accomplishments.”

Here is my take on the question. There was a time and place when we paid our human capital based on what they made or produced. In this new interconnected world we now pay them based on what they dream. There is no reasonable way that we can control the ideas that are in their head. We also can’t control the flow of ideas in this interconnected world.

If we claim that our human capital are assets to the organization , then we need to realize that they are assets and not a piece of property. HR’s role in our organizations is to be the gatekeeper to talent acquisition and we can’t expect that means we have to confront this issue headfirst. Allan Cox went on to state that “ all executes we meet in searches, though not appropriate candidates for an existing search can be suitable sources for referrals for those they know or know of who might make an ideal prospect for the current search we are conducting.”

Thus as an organization we are confronted with a decision. If we believe that they are assets to the organization then we have to treat them as such. We need to recognize that the human capital assets are non-owned leased talent who can go anywhere. If that is your true feelings then we need to recognize they are not property of the organization. On the other hand if you are living in an outdated world where you think of employees as property then recognize in the long run your talent searches are going to be limited. Understand that you will drive away talent not attract them in this innovative world we find ourselves in.

Are your human capital assets or chattel? Let's start a discussion on how the human capital fit into our cultures. Email me at dan@dbaiconsulting.com with your thoughts.

Thanks, Daniel, While you have some years on me, I'm old enough to remember they weren't "human capital" or "assets" but "people" (more or less) .Nowadays (if it hasn't always been so), they're what the final appellate judge says they are...